A rendering shows the arena proposed for Richmond, Va., designed by HOK. (Courtesy Spectra)
Facility part of $1.5 billion mixed-use development slated for downtown
Spectra has been awarded the rights to run all facets of a proposed new arena in Richmond, Va., pending approval of the project by the City Council.
The 17,500-seat facility, estimated to cost $235 million, would be part of a $1.5 billion mixed-use development intended to transform the downtown district in Virginia’s capital. Other components include a 500-room hotel, 2,100 new residential units and 500,000 square feet of office space, plus the restoration and conversion of the historic Blues Armory into a three-level grocery, music venue and ballroom.
The new arena, designed by HOK, would replace Richmond Coliseum, a 48-year-old building formerly managed by SMG that closed its doors in early 2019. It would be torn down to clear space for new construction, project officials said.
Private investors will buy nonrecourse bonds to pay for the $235 million arena, Spectra officials said. The city is investing future incremental tax revenue, which will then be used to repay the bond debt for the arena construction. The bond debt will not be issued by the city, which is not required to fund any shortfall in revenue to repay the bond debt.
The remainder of the mixed-use development will be funded by private investment.
“It’s similar to what was done in Allentown (Pa.) and some other markets,” said John Page, Spectra’s president of venue management. “They’re really using some of the distressed property now to get it back on the city’s tax rolls and finance off of that.”
Michael Hallmark, a veteran architect and a founder of Capital City Partners, is part of the development team. In a brief phone call with VenuesNow, Hallmark said that he has been involved with the project for a few years and remains confident that it will move forward.
Spectra’s deal is with the NH District Corp., a nonprofit formed to help redevelop a 10-block stretch in the Navy Hill neighborhood in downtown Richmond. The terms call for Spectra to manage the city-owned arena and run the food service, as well as sell sponsorships and premium seats.
As part of the agreement, Spectrum has committed $8 million upfront to pay for soft costs such as architect and engineering fees to continue planning the arena portion and keep the project on track, Page said. Spectra would be paid back through dollars reinvested in the project after financing is completed, he said.
At this point, there would be no sports tenant for the new arena, although minor league hockey is a possibility, in addition to occasional college basketball games, Page said. Rough numbers for premium seats are 28 suites and about 500 club seats, he said.
Spectra has a strong presence in Richmond. The company runs the Greater Richmond Convention Center and operates food service at Virginia Commonwealth University in the city. Elsewhere in Virginia, Spectra runs Chartway Arena in Norfolk and the Sandler Center for the Performing Arts in Virginia Beach.
“It’s been a while since an arena was built there and we’ve seen the impact of the convention center and what it can mean for the community,” Page said. “Ultimately, by adding an extra 500 rooms (with the proposed hotel) it will elevate the destination of Richmond from a convention standpoint. We’ve seen what new arenas can do in midsize markets like Des Moines, and the Greater Richmond area continues to grow significantly as well.”
Correction: The previous name for Chartway Arena was used in the original post for this story.